Crude oil hits a new high of $121.17 this week, trading down to a low price of $115.3. OPEC members are seeking the idea of Russia exempting their oil production deal.

Russia’s waiver of oil production targets could pave the way for Saudi Arabia, the United Arab Emirates and other OPEC producers to further boost crude output, The Wall Street Journal reported. WTI closed almost all of its gains below $116 a barrel after rising nearly $5 earlier.

Crude prices have risen to $131 a barrel in recent months, their highest since early March, as EU sanctions ban Russia from buying offshore oil, including temporary waivers for pipeline orders. As for sanctions against Moscow for the invasion of Ukraine, it also proposed a ban on insurance related to oil shipments to third countries. Oil still showing longest monthly gain in more than a decade.

Crude oil prices will continue to rise in 2022, as the European crisis tightens Russian crude orders and demand picks up, affecting global supplies, depleting inventories and pushing up production costs all the time.

China has also eased zero-covid-case restrictions, and there are signs of further easing of travel and lockdown restrictions. Shanghai will allow people in low-risk Covid-19 areas to leave their homes. It’s a fresh sign that could boost demand for crude over the past two months.

Thirteen OPEC and 10 non-OPEC nations will hold a crude oil production policy meeting on Thursday, where a consensus is expected to increase daily output. In the past, OPEC has rejected the U.S. proposals to curb rising inflation risks.

It is expected that the crude oil market will continue to rise in long term. According to the forecast of continued growth in demand and shortage of supply, oil traders can wait for a high price to buy at $113.5 and set a stop loss at $110 and profit taking at $120 per barrel.

Analyzed by: Mr. Nhim Kosol, Independent Analyst